The railroad has been an established means of
moving people between urban areas in the Northeast since the 19th century. Today, with
congestion reducing the effectiveness of highway and air travel, passenger rail
increasingly offers a cost-effective solution to providing mobility between cities.
Intercity passenger rail can offer a number of cost advantages. The
introduction of new technology has succeeded in substantially reducing operating and
maintenance costs of intercity rail. Operating in rights-of-way, in existence since the
last century, new or expanded routes can be brought into service at a comparatively low
cost. Existing intercity rail routes run between city centers. Therefore, they provide
downtown service industries with the access needed to move thousands of individuals into a
restricted urban core without the time and monetary costs associated with construction of
new highways and ancillary parking facilities. When connected to airports, intercity
passenger rail adds a new dimension to the service industries located in city centers: the
ability to access the most important secondary urban hub -- the airport. Thus, efficient,
intercity passenger rail enhances the capacity of other components of the Northeast's
multimodal transportation systems.
An efficient transportation system can have a dramatic impact on the
Northeast's ability to sustain and increase the states' regional production. The ability
to move goods and people efficiently improves mobility and the productivity of individuals
and businesses. Failure to maintain the competitiveness of a region through improved
transportation can result in a steady but continuous erosion of the economic base of a
region -- which in its own way can be as devastating as a more visible economic recession.
In times of tight budgets and competing demands for public funds, policy and |
financial
support for transportation investments requires thoughtful demonstration of the benefits
of such investments. When faced with difficult financing choices, policy-makers need a
clear understanding of the economic impacts of their decision -- a means to identify both
the steady loss of economic performance by the public and private sector when
transportation investments are not made, as well as the increases in economic growth when
needed investments are made. Economic benefits show the changes in a regional economy -- a
state, city or transportation corridor, that result from transportation investment or
disinvestment, as well as the comparative advantage of investing in different
transportation options.
Most economic impact studies of transportation measure immediate impacts on
the economy during construction and the "value of time" to those who use the
improved transportation system. This "consumer surplus" approach cannot fully
capture the effect that the transportation investment has on the performance of a
particular economy. Do land values change as a result of the investment? Are jobs in that
area more accessible? Does the improved transportation attract other capital investments?
Will the investment enhance private sector income growth as well as the tax base?
"Economic rent" can measure the economic impact of any
transportation project at any location. It tells decision-makers what the project will do
for the regional and local economy, and how the benefits will be distributed
geographically. It provides estimates of the impact of a given investment in terms of the
increase in gross national product attributable to the region, job creation, income
growth, property value enhancements, and expansion of the tax base. In short, it captures
the benefits to the citizens of the particular economy which is affected by the
investment. |
1995
